Think of an RRSP as a tax-deferred account: money grows tax-free until you withdraw it. Any money you withdraw from an RRSP is considered taxable income. When you withdraw the money, our custodian BBS Securities Inc. will automatically withhold some of what you owe in taxes, but you will still have to declare the withdrawal as income that year, and you may be asked to pay additional taxes depending on your marginal tax bracket.
There is also a limit to how much you can contribute to an RRSP every year. If you exceed the contribution limit by more than $2,000 there is a financial penalty. You can contribute less than 18% of your income or the annual contribution limit. To see how much contribution room you have in any given year, get out your Notice of Assessment from the previous year and look for the page that covers RRSPs.
You’ll be able to find all the tax documents you need from Moka at the end of March.
If you have any questions about how to read tax documents from Moka, please reach out! For further questions about filing your taxes, we strongly suggest you consult a government website or a licensed tax professional.